Facebook employees may face pay cut if they move to cheaper areas to work from home

Mark Zuckerberg says he expects about half of Facebook Inc.’s employees to work from home five to 10 years from now, but there’s a catch for those expecting to take their fat Silicon Valley salaries and live like kings in a rural area.

As in, a pay cut.

The Facebook

chief executive laid out the company’s future remote-working plans during a videoconference with employees Thursday. Zuckerberg said Facebook will “aggressively” ramp up the hiring of remote workers, though not all employees would be allowed to permanently work from home, at least at the start.

And those who choose to work where the cost of living is less should expect to be paid less.

“That means if you live in a location where the cost of living is dramatically lower, or the cost of labor is lower, then salaries do tend to be somewhat lower in those places,” Zuckerberg said.

Facebook already pays based on location, but Zuckerberg said employees working remotely must notify Facebook if they move to a new area before Jan. 1, 2021.

“We’ll adjust salary to your location at that point,” he said, noting it will be necessary to take taxes into account. “There’ll be severe ramifications for people who are not honest about this.”

That may put a crimp in the plans of some workers hoping to make their salaries go a lot farther in cheaper areas. A recent survey of San Francisco Bay Area tech workers found two-thirds would consider moving away from the pricey area if they could work remotely. “It makes no sense paying Bay Area rent if we can earn our salary living elsewhere,” one startup employee told Bloomberg News.

As of 2018, the median employee compensation at Facebook was more than $240,000 a year. The median home price in Menlo Park, Calif., where the tech giant has its headquarters, is $2.4 million, according to Zillow, while the median home price in the wider Bay Area was $928,000 last year.

Zuckerberg said that in a company survey, of the people who said they would want to work remotely full time, about 45% were “pretty confident” that they would move to another place if they had that opportunity, with an additional 30% saying they “might” move. About 60% of that total said they’d prefer to move to a smaller city or town.

Ultimately, Zuckerberg said the changes will help Facebook become more diverse in its workforce.

“When you limit hiring to people who either live in a small number of big cities or are willing to move there, that cuts out a lot of people who live in different communities, different backgrounds or may have different perspectives,” he said. “Certainly being able to recruit more broadly, especially across the U.S. and Canada to start, is going to open up a lot of new talent that previously wouldn’t have considered moving to a big city.”

About 95% of Facebook’s employees are currently working from home due to coronavirus stay-at-home orders. The company has previously said workers will be able to work from home at least through the end of the year.

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Work-from-home productivity pickup has tech CEOs predicting many employees will never come back to the office

In Silicon Valley, the answer from many tech companies is that many won’t, and maybe that’s a good thing.

In recent days, Twitter Inc.
has said that employees have the option of never coming back to the office to work, while Facebook Inc.
Google parent Alphabet Inc.
Salesforce.com Inc.
and Slack Technologies Inc.
have said they don’t expect workers back in the office until 2021 — if then.

That just may be the beginning: At least six prominent tech companies are considering permanently moving a large slice of their workforces to work-from-home status, their chief executives told MarketWatch this week.

“It’s hard to not see 20% to 40% of our workforce be remote,” Slack CEO Stewart Butterfield told MarketWatch in an interview Thursday on — appropriately enough — a Zoom
video call.

“We need to make real-estate decisions long in advance, two to three years, and are in the speculative conversation now if we have 30%, 40% fewer desks,” Butterfield said in discussing conversations he was having with fellow Slack executives this week. “We may make the office more of a hotel.”

Don’t miss: Companies reveal their plans for what work will look like when America returns to the office

The COVID-19 pandemic forcing those who could work from home to do so has led to a surprising result — improved productivity. U.S. workers were 47% more productive in March and April than in the same two months a year ago through cloud-based business tools, chat applications and email, according to an analysis of 100 million data points from 30,000 Americans by workplace-monitoring company Prodoscore.

“I was pretty wrong about this. I thought productivity was going to plunge, but it has been very good,” Okta Inc. CEO Todd McKinnon
added, as the company considers a new dynamic work initiative. He said he could see Okta following Twitter’s path “until there is a vaccine or a treatment.”

As small businesses and nonessential services slowly begin to reopen, tech CEOs like Butterfield and McKinnon
are in internal discussions about fundamental changes to their workforces with far-reaching social implications. Not only are they open to letting a majority of employees work remotely; they’re vastly scaling back travel and attendance at conferences, hiring talent from all parts of the country, reducing office space and using the office as a place to socialize as much as work.

The financial impact on cities like San Francisco and Seattle, where tech is the chief economic engine, could be devastating. Use of commercial real estate and public transit are likely to decline. Restaurants, bars and other gathering spots could be endangered. And then there is the toll on workers, many of whom feel increasingly isolated and stressed, worried about the security of their jobs even as they log long shifts at home.

But that is the collateral damage from a new workforce that could also save companies billions of dollars in operational costs; greatly reduce traffic and liability related to sick employees; and enhance productivity from a workforce that eats, sleeps and lives at its diffuse, de facto offices. Tech is uniquely positioned to take advantage of working conditions turned upside down and sideways because it has the technical resources to support a decentralized workforce, and a significant slice of its employees already worked remotely.

In a free-wheeling “virtual dinner” this week attended by five software CEOs — McKinnon, Box Inc.’s
Aaron Levie, PagerDuty Inc.’s
Jennifer Tejada, Twilio Inc.’s
Jeff Lawson and Zuora Inc.’s
Tien Tzuo — the topic elicited the most animated conversation.

See also: Twitter employees can work from home as long as they wish

“Twitter will cause a snowball of other organizations going forward,” said Levie, who has weaned on the management style of former Intel Corp.
CEO Andy Grove, who weaved through offices to get an up-close look at workers. “We may not go back to work the same way [at Box]. Things are faster, more action-oriented with remote workers. With videoconferencing, I can check in on customers in the U.S., Japan and Europe in one day.”

“Our salespeople meet five to eight customers a day now [via videoconferencing] versus the one it took them three days [to see in the past] because of travel,” he added.

A major reason for improved productivity is that people have had little else to do during the shelter-at-home directive and felt pressure to produce to retain their jobs, countered Shane Metcalf, chief culture officer at 15Five, an enterprise technology company.

“One of the shadow side effects is that employees are working longer hours, and feel as if they’re always on call,” he said. “They are stressed.”

See also: Cisco profit continues to flow amid pandemic despite revenue slowdown

To be sure, not everyone will follow Twitter’s lead. Some, like Apple Inc.
Nvidia Corp.
and Amazon.com Inc.
have devoted billions of dollars to sparkling new facilities that will always house thousands of employees. And some people want to return to an office, pointed out PagerDuty’s Tejada.

Added Butterfield: “Some employees are going insane [because they] are cooped up alone in an apartment or have kids and want to go back to work. The majority want to be in the office.”

“We don’t believe that ‘office-less globally’ is in our company’s best interest to build strong company culture or long-term productivity. Like most things in life, the best answer is typically something that moderates between two extremes,” Vonage Holdings Corp.
CEO Alan Masarek told MarketWatch via email. None of the company’s 2,400 employees will be required to come back to the office “until they are comfortable doing so.”

Record traffic usage of Zoom, Microsoft Corp.’s
Teams, Slack Technologies Inc.’s
enterprise messaging, Cisco Systems Inc.’s
Webex and other services underscores the always-on workplace.

“Some elements of this work-from-home scenario will not go away,” Cisco CEO Chuck Robbins said during a conference call with analysts Wednesday following the company’s quarterly earnings announcement. For example, Webex hosted more than 20 billion meeting minutes in April, compared with 14 billion in March and 7 billion in February.

“The pandemic has created a permanent shift in the way people are working, and while not every organization will go 100% work from home forever, there will certainly be more support for virtualized environments,” Masarek said.

One company going all-in virtually is Dialpad because, quite simply, it can. CEO Craig Walker, who helped develop Google Voice technology, was leaning that way before the pandemic forced most of the economy to shut down. He wants the communications-software firm’s 400 employees to work from home four or five days a week, he said, and he plans to halve office space to accommodate a staggered work schedule.

No matter what path companies take, they agree it will not be the same. Some employees will exclusively work from home, while others will opt for the office. And others may do both.

“It’s back to a whole new way of work — like back to the future,” says Quick Base CEO Ed Jennings, who took over the $1 billion, 500-person company this week, but has yet to visit headquarters.

Still, he’s already re-imagining what it will look like in the future — with more open space, partitions and collaboration spaces.

“It is hard to create depth of relationship when you communicate strictly via virtual meeting,” Jennings said. “Employees say these days they get things done so much faster at home. The question is whether that is sustainable.”

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Airbnb will give laid-off employees 14 weeks base pay and health insurance, but millions of other laid-off workers are not so lucky

The 1,900 employees Airbnb announced it is laying off on Tuesday will be leaving the company with an unusually generous severance package.

U.S. employees who are laid off, amounting to 25% of the company’s workforce, will receive “14 weeks of base pay, plus one additional week for every year at Airbnb,” CEO Brian Chesky, said in a note to employees. They will also have 12 months of health insurance paid for by the company through COBRA. For employees outside the U.S., Airbnb will cover their health-insurance costs “through the end of 2020.”

See also:Did you lose your job and your health insurance due to coronavirus? Here’s how to get coverage before time runs out

Airbnb’s decision to offer all employees 14 weeks of base pay regardless of how many years they’ve been with the company is, however, unusual.

“While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce around a more focused business strategy,” Chesky said. (Airbnb declined to comment further.)

In 2019, companies offered an average of 1.1 weeks of severance per year of service, with an average payout of 19.4 weeks of severance total, according to a survey released last year of 10,000 job seekers conducted by Challenger, Gray and Christmas, a Chicago-based outplacement and career-transitioning firm.

Typically, severance packages are tied to years of service, Challenger said. Within the hospitality and travel sector, average severance was about 2 weeks pay per year of service and 19 weeks total.

Some 30 million Americans have filed for unemployment benefits in the weeks since the coronavirus pandemic took hold in the U.S. and businesses began shutting down. Private-sector companies lost 20.2 million jobs in April amid the coronavirus crisis, according to data released Wednesday from Automatic Data Processing Inc. Service-producing industries slashed 16 million jobs in April, led by a 8.6 million decline at hotels and restaurants. Retail and transportation also lost 3.4 million positions.

Related:Being furloughed beats a layoff: What it means for millions of suddenly jobless Americans

Airbnb’s decision to offer such a generous package is an “investment in goodwill to hopefully hire them back once demand returns,” said Andrew Challenger, vice president of Challenger, Gray and Christmas. Additionally, it is a way for both parties to make a clean break, he added.

“The jobs disappeared but the company wants to take care of employees who helped build it,” he said. Also, if Airbnb employees accept the severance package, they “forfeit their ability to litigate the termination decision,” he noted.

On Wednesday, Uber Technologies Inc.

also announced it is laying off 3,700 full-time employees in customer-support and recruiting roles as the company deals with a steep drop-off in ride volume due to COVID-19 and proceeds with a hiring freeze.

The company’s CEO, Dara Khosrowshahi, plans to forgo his base salary, which was $1 million in 2019, for the rest of the year, according a filing with the Securities and Exchange Commission. The company did not publicly disclose allotments for laid off employees’ severance pay. But it said it expects to “incur approximately $20 million related to severance and other termination benefits.”

Marriott International Inc.

has also trimmed its workforce in response to the plunge in global travel amid the coronavirus pandemic. Unlike Airbnb and Uber, Marriott furloughed around two-thirds of its 4,000 corporate employees.

The hotel chain said it plans to bring back these workers once bookings return to pre-coronavirus levels. The majority of furloughed employees will also be receiving health-care benefits, but they will not be receiving a paycheck. However, they are still eligible for unemployment benefits.

Airbnb’s generous severance package helps boost its reputation, said Julie Schweber, a senior knowledge adviser at the Society for Human Resource Management (SHRM).

“It demonstrates that they treated people with respect and dignity, and people don’t forget that,” she said, applauding Airbnb’s actions. “When layoffs are done right folks may love coming back if things change.”

On top of the severance pay and health insurance, laid-off Airbnb employees are also being allowed to keep their Apple

laptops, the company said, stating that the computers are “an important tool to find new work.”

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Tesla to extend furlough for some employees by another week: internal email By Reuters

© Reuters. FILE PHOTO: The view of Tesla Inc’s U.S. vehicle factory in Freemont, California

(Reuters) – Tesla Inc (O:) told furloughed employees on Friday that they will remain out of work for at least another week, postponing a plan to resume normal operations on May 4 at its San Francisco vehicle-assembly plant, according to an internal email.

“For furloughed employees, unless you are contacted by your manager about a start date, you will remain on furlough until further notice, at least for another week,” the company’s in-house counsel Valerie Capers Workman said in the email, which was sent to employees and seen by Reuters.

Tesla suspended production at its Fremont, California plant on March 24.

The extension comes days after health officials from San Francisco County, along with five other Bay Area counties, said they would revise “shelter-in-place” orders that are set to expire on Sunday.

The new orders will keep the restrictions in place and extend them through May, with limited easing for a small number of low-risk activities.

The company was not immediately available to a Reuter’s request for comment.

The electric carmaker last month furloughed all non-essential workers and implemented salary cuts during a shutdown of its U.S. production facilities because of the coronavirus outbreak.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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United cuts May flights by 90%, tells employees to brace for job cuts By Reuters

© Reuters. A United Airlines passenger aircraft arrives over the top of residential houses to land at Heathrow Airport in west London

By Tracy Rucinski

(Reuters) – United Airlines Holdings Inc (O:) said on Wednesday that it has cut its flight schedule by 90% in May and expects similar cuts for June as a result of the coronavirus pandemic, and warned that travel demand that is now “essentially at zero shows no sign of improving in the near term,” making job cuts likely.

United disclosed its outlook in a memo to employees that it publicly released. The memo was from Chief Executive Oscar Munoz and President Scott Kirby.

Like other U.S. airlines, travel demand for Chicago-based United has cratered as most U.S. states have ordered residents to stay at home in order to contain spread of the coronavirus.

United said it flew less than 200,000 people in the first two weeks of April, a 97% drop from the more than 6 million people it flew during the same time in 2019. It expects to fly fewer people during the entire month of May than it did on a single day in May of last year, Munoz and Kirby said.

“The historically severe economic impact of this crisis means even when travel demand starts to inch back, it likely will not bounce back quickly,” they said.

“We believe that the health concerns about COVID-19 are likely to linger which means even when social distancing measures are relaxed, and businesses and schools start to reopen, life won’t necessarily return to normal.”

While the $5 billion that United expect to receive in government payroll support under the CARES Act bars its from involuntary furloughs before Sept. 30, the airline indicated that it expects to have to cut payroll after that. It said it will be offering new voluntary leave packages in the coming weeks and voluntary separation programs.

United said that the government money does not cover its total payroll expense, and noted that payroll is only about 30% of total costs, which also include airport rent and supplies.

So far more than 20,000 United employees have volunteered for unpaid leaves of absence.

United’s efforts to further cut payroll costs are similar to moves by peers Delta Air Lines Inc (N:) and American Airlines Group Inc (O:).

United is among airlines eyeing a separate $25 billion federal loan package for U.S. passenger carriers given expected favorable terms, Reuters reported on Wednesday.

United said last week it plans to start daily service on May 4 from Chicago to London, Newark to Amsterdam, and Washington to Frankfurt, and three flights a week between Washington and Buenos Aires starting on May 5.

It is canceling planned seasonal summer service from Newark to Prague; Stockholm; Palermo, Italy; and Reykjavik, Iceland; but continues to operate flights between the United States and Frankfurt, Brazil, Sydney, Tel Aviv and Tokyo, as well as cargo and repatriation flights.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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